U.S. anti-poverty programs have failed, Republican Ryan says

WASHINGTON, March 3 The U.S. government has
barely made a dent in poverty in the past 50 years despite
massive spending on programs to aid the poor, House of
Representatives Budget Committee Chairman Paul Ryan said in a
report on Monday.

The Wisconsin Republican, a potential presidential contender
in 2016, released the report a day before President Barack Obama
sends Congress his own annual budget proposals, expected to
include several provisions for helping the poor.

By releasing the report, Ryan, a fiscal hawk who was his
party's unsuccessful vice-presidential candidate in 2012,
appeared to be presenting himself as being more committed to
helping poor Americans hoist themselves into the middle class.

He said many of the 92 federal programs aimed at fighting
poverty were "haphazard" and ineffective, despite a cost of $799
billion in fiscal 2012.

The report, compiled by the Republican staff of Ryan's
committee, said the U.S. poverty rate of 15 percent in 2012 was
down only slightly from the 17.3 percent in 1965, the year after
President Lyndon Johnson launched his "war on poverty" with new
spending on aid programs.

"A large problem is the 'poverty trap,'" the report said.
"There are so many anti-poverty programs - and there is so
little coordination between them - that they often work at
cross-purposes and penalize families for getting ahead."

The report did not recommend specific cuts to individual
programs, but Ryan said it was meant to launch a public debate
about anti-poverty spending. He was expected to outline his
proposals in a Republican budget plan due out in a few weeks.

OBAMA BUDGET WILL TACKLE POVERTY

Obama's 2015 budget request is expected to include expansion
of a tax credit for the working poor and an expansion of Head
Start, the pre-school education program for poor children
launched by Johnson.

Ryan's report sharply criticized Head Start, which cost $8
billion in fiscal 2012, for "failing to prepare children for
school."

It cited two studies done for the Department of Health and
Human Services that found the three- and four-year-olds who
participated in the program showed little to no evidence of
cognitive improvements over non-Head Start students by the time
they reached the end of first grade and third grades. In some
cases they had lower math scores, the studies showed.

Ryan's report was largely supportive of the $59 billion
Earned Income Tax Credit, which Obama wants to expand, citing
several studies that found it largely met its aim of encouraging
work among low income people by providing them with a refundable
tax credit.

The report did cite problems with non-compliance from people
who fail to take advantage of the credit, tax preparation costs
that eat into the benefits, and improper payments that reached
$11 billion last year.

Obama in his State of the Union speech in January called for
expanding this credit to childless workers, who benefit far less
than those with children. But the Ryan report cited a study that
showed that expansion of the credit in the 1980s and 1990s
tended to discourage workforce participation by married women,
while increasing participation by others.

Ryan's budgets have previously proposed reaping savings by
turning the Medicaid health care program for the poor into a
block grant for states, which is opposed by Democrats.

The report cites numerous problems with the fee-for-service
program, which cost $265 billion in fiscal 2013 and was
significantly expanded by Obama's health insurance reform law.

It cited findings of worse health outcomes for Medicaid
patients compared to those with private insurance and Medicare,
fewer physicians who accept Medicaid, lower reimbursement rates
and increases in unnecessary and expensive visits to hospital
emergency rooms.

The Ryan study identified nearly $300 billion spent on
health care for the poor annually, over $200 billion on cash
aid, over $100 billion on food aid, over $90 billion on
education and job training and nearly $50 billion spent on
housing.
(Reporting By David Lawder; Editing by David Storey and Chris
Reese)

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